I am writing this to you as one of the millions of merchants (voters) across the USA who accept credit cards for payment. As you have been made aware in the last few years many card issuing banks have begun rejecting legitimate chargeback replies even though merchants are filling the replies out in great detail proving the original charge is legitimate and the chargeback complaint should be removed and decided in favor of the merchant. It has gotten so bad that on some of the chargebacks a 5 year old child could see that the cardholder is simply trying to steal merchandise and/or services from the merchant. Frivolous chargebacks allowed to be presented by the card issuing bank is an obvious violation of Federal Regulations E and Z. They are also a form of felony theft by the cardholder. This is causing merchants and the US Government millions of dollars in lost revenue.

Also the card associations’ chargeback procedures leave much to be desired. In the typical non efficient ways of MC/Visa/Discover nothing official ever comes if you win. Only if you lose. Incidentally the cardholder’s issuing bank makes the determination not the merchant’s credit card company. Kind of a kangaroo court! American Express is somewhat better on these issues because they see both sides of the transaction.

We also need a better way to monitor the chargeback progress after it has been filed. Currently there is basically nothing.

And besides “Friendly Fraud” we need a better way to check the validity of all online (eCommerce) and phone orders for outright fraud (identity theft) which would also help in replying to “friendly fraud” chargebacks. In addition to address and zip code check we need to be able to check the cardholder’s name and email address currently not offered by MC/Visa/Discover. American Express does offer email address verification.

We also need the card associations MC/Visa/Discover/American Express to recognize email delivery of merchandise as valid Proof of Delivery.

The verification for foreign cards is even worse causing merchants to decline many legitimate foreign card orders which loses millions of dollars in revenue for merchants and tax revenues for the US Government.

We would also like to see a user friendly way for merchants to report cardholders for felony theft and prosecution. Currently most Police Departments ignore these requests even if the theft committed is in the six figures.

We need to find a Lobbyist(s) to force the card issuing associations to change their antiquated chargeback regulations and procedures. Either that or a Class Action Suit needs to be filed on the behalf of merchants. As you know in the last few years some card issuing banks have begun rejecting legitimate chargeback replies even though merchants are filling the replies out in great detail proving the original charge is legitimate and the chargeback complaint should be removed and decided in favor of the merchant. It has gotten so bad that on some of the chargebacks a 5 year old child could see that the cardholder is simply trying to steal merchandise and/or services from the merchant. I have verified that many banks especially larger ones are understaffed and aren’t even reading the chargeback replies filed by merchants. They just “click and return” for prearbitration. Prearbitration is of course a “kangaroo court!”

Since MC/Visa/Discover/Amex remain sitting on their hands about this growing problem it’s time for us to fight back any way we can!Starting immediately I am advising all merchants to put the below wording in your replies to chargebacks. I wouldn’t put it in a retrieval request as that is usually a sign that the card issuer is honest and any decent reply from the merchant will satisfy the inquiry. Put it right at the top of your reply-don’t be shy. And don’t worry about being “nice!” The card issuers aren’t being nice to you so until we can get the government to force MC/Visa/Discover/Amex to rewrite their unfair antiquated chargeback policies and procedures let’s do everything we can.

____________________________________________________________________Wording to insert in Chargeback reply

By reviewing the following information in my reply you can see that this is a frivolous chargeback and if allowed to be continued by you is an obvious violation of Federal Regulations E and Z!

Card issuing banks are not allowed to encourage and condone”friendly fraud”. Your cardholder received our merchandise in a timely manner, used it and is now trying to do a chargeback basically committing felony theft on us the merchant. If this chargeback is not dismissed by you it will be immediately reported mentioning your bank to the proper authorities including The Federal Reserve and Attorney General in your state.Please find relevant links below to this matter.

There is a company out there called Homeland Arbitration, homelandarbitration.com. They are also previously known as FIAD Services and other companies all owned by Michael Cooper.

This company contacts small businesses and tells them that they will help them get all their money back for free-they just need to pay a percentage fee on the amount they recover. To recover this money, the small business sends Homeland all their CC statements and any contracts they have with any company they had spent money with. Homeland (not the small business) starts initiating frivolous chargebacks.

And it gets worse – Homeland actually changes the contract verbiage before they send it in to give them a better chance of winning the chargeback. The individual in this chargeback was called and he stated that they had changed his contracts before sending through the information for the chargeback as well. This individual also stated that he told Homeland not to initiate chargebacks and they did it anyway.

I received your contact information off of a website that more than likely was built by one of the companies we are investigating. These companies are known as “Online Business Opportunity Scam” companies charging anywhere between 10 and 100 thousand dollars for marketing, coaching, mentoring, tax services, and then never providing the services that were paid for by the customer. Numerous clients have confirmed this exact scenario and I wanted to go over some qualifying questions with you regarding your website. The qualifying questions to begin an arbitration case for you are as follows:

What companies have you dealt with regarding your home based business?
When did this all begin for you?
How much do you think you have spent with all the companies you dealt with concerning your home based business?
How did you remit those payments?
Is xxxxx.com the only website you have?
What have you done so far to recover the money spent with these companies?

A little about us, there are no upfront fees for our service. We build and work the entire arbitration case from start to finish, strictly on a contingent basis. Our fee is only applicable at the point in time that the case has been won and the money has been refunded to you. Worst case scenario if we happen to lose your case, there will be NO FEE. After we receive your documents and assess your particular scenario, then we will be able to accurately quote you a fee percentage. We would send you our contingent service agreement which allows us to represent you in the arbitration case, and it would also have the quoted fee percentage. Again, you are not paying any of it upfront, it is just acknowledging that you understand what you would be responsible for at the point of time that the money has been recovered. Should you choose to accept, you would simply print it off, sign it and send it back and we would confirm and finalize your case and start filing.

I despise people that knowingly commit “Friendly Fraud” That is they file a chargeback knowing they received tickets or other merchandise as promised and are just trying to weasel out of paying. To those that do are you aware that the victimized merchant can file felony theft charges against you and you could see real jail time?

Many cardholders think if they file a chargeback claim the card issuer reimburses them. Not so-it’s the merchant that sold you the merchandise in good faith. Whether or not a chargeback is filed often depends on the issuing bank. My bank BMO Harris for example is very strict & does not allow frivolous chargebacks. I have filed one chargeback in the 9 years I’ve been with them and I was very justified in doing so, but they made me jump through hoops to prove that I was right and that I had first tried to settle with the merchant. Unfortunately many banks are not like this. They have low level staff answering chargeback requests that have no business expertise or knowledge of the marketplace. You can almost hear Sam or Sally Newperson saying “You want to file a chargeback? Oh goodie that sounds like fun-let’s do one!”

So now we have a bank who’s cardholder went on a legitimate website as an example, picked out exactly what they wanted, clicked on acceptance of all terms & conditions, paid with their credit card and received exactly what they wanted and then want to do a chargeback because of some misunderstanding, petty complaint or worse yet so they can wind up getting the merchant’s product for free. In most cases they have never even attempted to call and discuss their alleged grievance with the merchant.

Cardholders have to realize that just because they paid for example $600 for an item that isn’t the profit for the merchant. To use Ticketbrokers as an example again they may have paid almost or even over $600 for that ticket and are often operating on a razor this profit or at times a loss.

Cardholders please stop stealing from merchants! Courts please order that MC/Visa/Amex/Discover have to mandate fair handling of chargeback complaints by all card issuers! Merchants start pressing felony charges against offending cardholders and put them in jail with the rest of the thieves!